‘Basically you’re using the federal tax code to entirely create a private choice system in every state,’ Kornheiser says

By Guy Page

The leadership of the House Ways & Means Committee wants nothing to do with allowing Vermonters to access a One Big Beautiful Bill tax credit that would give them a dollar-for-dollar return on money contributed to private school scholarships.

Ways and Means, the committee with oversight over all tax policy and legislation, on Wednesday discussed the section in HR 1, the One Big Beautiful Bill federal law named and pushed through Congress by President Donald Trump, that creates tax credits for contributions to Scholarship Granting Organizations (SGOs).

‘Basically you’re using the federal tax code to entirely create a private choice system in every state’

– House Ways & Means Committee Chair Emilie Kornheiser (D-Brattleboro)

The federal law gives states the opportunity to ‘opt out’ of the SGO tax credits, according to legislation introduced by Chair Emilie Kornheiser (D-Brattleboro). In committee this week, she expressed a strong desire to opt out — or to require explicit legislative approval before participating — citing concerns that the program could divert resources from Vermont’s public education system.

Kornheiser described the tax credit as “a quite brilliant complete workaround from the entire state level education system, in that it created a system where basically you’re using the federal tax code to entirely create a private choice system in every state.

“I want to make sure that everything we’re doing is focused on the education system that we have and not any added payoff that the federal level may cause,” Kornheiser said. “I also, on tax ethics grounds, like to avoid as many loopholes as possible, even if they are federal tax loopholes and not state tax loopholes.”

According to committee testimony on February 11, Kornheiser prefers the language of H.770, introduced by her and Education Chair Peter Conlon (D-Cornwall), which would “preclude Vermont’s participation in the federal tax credit program for contributions to scholarship granting organizations.” 

The SGO tax credit opt-out put forward in H770 may be folded into a miscellaneous education bill, Kornheiser said. Here’s how the OBBB tax credit would work, according to the National Coalition for Public Education:

“The One Big Beautiful Bill Act, Public Law (P.L.) 119-21, creates a first of its kind program to funnel taxpayer funds into private elementary and secondary schools. Beginning in 2027, any individual can contribute up to $1,700 per year to a “Scholarship Granting Organization” (SGO) and receive a dollar-for-dollar federal tax credit. The donations collected by the SGO could be used to provide “scholarships” or vouchers to students from families who earn up to 300% of the area gross median income. In return, the donating individual receives a tax credit equivalent to the amount donated, which lowers their tax bill.”